Is the Digital Age Leaving You Behind? Recent World Bank Report Offers Insights
The World Bank has recently launched the Digital Progress and Trends Report. The insightful report tracks the global progress of digitalization, summarizes emerging technology and market trends, and high-lights policy shifts and debates.
The opportunities of digitalization for the economy are manyfold as the digital sector generates positive spillovers on the broader economy by driving innovation, economic growth, and job creation. The IT services segment has been the fastest-growing segment of the global economy over the past two decades.
The report shows that digitalization is not a level playing field and poses many challenges for the world as well.
Key Challenges:
Uneven progress and distributional impact of digitalization within and across countries. It is no surprise that low-income countries overall are lagging further behind (internet use, data speed etc).
Concentration of information, profits and power due to economies of scale and network effects.
Displacement of workers due to accelerated automation and lack of social protection due to increasing gig works.
Spread of misinformation and extremism on social media platforms and algorithms contributing to a societal divide.
Increased electricity consumption and greenhouse gas emissions due to growth of data and massive digitalization.
Privacy and security vulnerabilities.
Specific challenges driven by the use and development of AI. AI could potentially deteriorate the terms of trade and devalue the comparative advantage of low- and middle-income countries. In addition, AI could generate natural monopolies that reap all of the rents generated with AI.
Explanation: This figure presented by World Bank shows how firms in low- and middle-income countries continue to have huge untapped potential in the use of digital technology for payments and sales. The lag is not only about whether the technology is used or not (see blue bars = extensive margin in the figure), but also on how frequent the technology is used. As reported by the World Bank, only one in five firms in Bangladesh, Burkina Faso, Ethiopia, Ghana, and Senegal use online banking for payments and none of the firms in these countries use online banking as the most common method for payments. Explore the World Bank's "Global Digitalization in 10 Charts" to learn more.
AI Policies and trend
AI comes with risks of privacy, algorithmic bias, natural monopolies, fraud, cybersecurity, copyright, and misinformation. These risks poses many challenges for policymakers and regulators to ensure a responsible AI environment that accounts for ethical and accountable development, deployment, and use of AI technologies.
It involves integrating principles and practices that prioritize human values, societal well-being, and the long-term impact of AI systems minimising potential risks and harms of AI.
Currently, there are some common foundational principles that guide AI regulation. However distinct variations exist in the specific approaches and priorities adopted by different countries and private sector entities. The EU opted for a structured and risk-based legislative framework (AI Act), while the US has opted for a more flexible and diverse AI regulation.
Read the full report here.
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